Buffett’s 7 Nuggets of Wisdom at Berkshire Hathaway Meeting

On gold, U.S. banks and the psychotic drunk that is the stock market, the Oracle of Omaha has spoken.

By Geoff Kirbyson|May 07, 2012 at 08:30 AM

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Warren Buffett covered the Omaha, Neb., waterfront at the Berkshire Hathaway annual general meeting over the weekend. Flanked by his vice chairman, Charlie Munger, with whom he claims to have never had an argument in more than a half-century of working together, Buffett addressed investing, the banking system, acquisitions and tax rates.

“If you own an ounce of gold now and you caress it for the next 100 years, you’ll still have an ounce of gold. It’s very hard for an unproductive investment to be productive for any period of time. When Berkshire started, gold was at $20 and Berkshire stock was at $15. Now gold is at $1,600 and Berkshire is at $120,000.”

2. On banks:

“American banks are in a far, far better position than they were three to five years ago. The U.S. banking sector is in fine shape. The European banking system is gasping for air. “

3. On tax rates for the rich and the “Buffett rule:”

“People who make large incomes should pay a tax rate around 35%. The 400 largest incomes in the U.S. make $270 million each and 131 of them pay below 15% in taxes. They’re paying less than standard payroll taxes. It would affect very few people and it would raise a lot of money.

In 2004, 2006 and 2010, with no tax planning and no Swiss bank accounts, I paid the lowest tax rate among all employees at Berkshire’s Omaha headquarters. That’s between 20 and 30 people. That’s astonishing.”

4. On American jobs at Berkshire:

“We have more than 270,000 employees and I don’t think more than 15,000 of them are outside of the U.S. We invested $8 billion last year in plants and equipment and 95% of it was in the U.S. There is no shortage of opportunities in the U.S.”

5. On stocks:

“The beauty of stocks is they sell at a variety of prices. That’s how Charlie and I have gotten so rich. The market is a psychotic drunk, and sometimes Mr. Market does very strange things. It’s built into the system that stocks get mispriced. Don’t behave like the psychotic drunk. The stock market is the most obliging, money-making place in the world.”

6. On acquisitions:

“A month or two ago, Berkshire considered a $22 billion investment. It didn’t happen.

If we like the business that we understand, we buy it. There’s always going to be good and bad news out there. We look to value. We don’t look at headlines.”

7. On newspapers:

“News is what you don’t know but want to know. I think there is a future for newspapers where there is a sense of community. It’s not as bulletproof as it was 50 years ago. I don’t know of a business plan that charges significantly for one version (the physical newspaper) and it’s free for the other (online version) that would work over time.”

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Read full coverage of Berkshire Hathaway Shareholder Meeting at AdvisorOne:

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